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N.Y. check-cashing company pleads guilty to Bank Secrecy Act violations

Belair Payroll Services Inc. never performed due diligence on more than $19 million in transactions

Belair Payroll Services Inc. apparently never learned my favorite old saying: Don’t let your greed write a check that your compliance program can’t cash.

The Flushing, N.Y.-based check-cashing company pleaded guilty to violations of the Bank Secrecy Act on Nov. 5, failing to follow the Act’s reporting and anti-money laundering requirements for more than $19 million in transactions.

In a statement, the Department of Justice (DOJ) said that certain individuals cashed checks with Belair between June 2009 and June 2011 that were earmarked for what appeared to be healthcare organizations. However, the shell companies actually did no legitimate business, and the bank accounts on which the checks were written belonged to foreign nationals. But Belair accepted these checks and provided cash in excess of $10,000 to those who cashed them.

According to the government, Belair did not perform its due diligence in discerning whether the checks were legitimate. Owner Craig Panzera and other workers “never obtained any identification documents or information from those individuals.” Belair also “filed currency transaction reports (CTRs) that falsely stated the checks were cashed by the foreign nationals who set up the shell corporations, and in certain CTRs, Belair failed to indicate the full amount of cash provided to the individuals.”

Belair and Panzera pleaded guilty for failing to follow reporting and anti-money laundering requirements. Panzera also pleaded guilty to conspiring to defraud the United States by willfully failing to pay income and payroll taxes. As part of the guilty plea, Belair will forfeit about $3.3 million, and Panzera will pay nearly $1 million in restitution fees. Any criminal sentencing for Belair or Panzera will be determined at a later date.

In recent days, the DOJ has stepped up its enforcement of anti-money laundering schemes, especially in enforcement of the Bank Secrets Act. Casinos have begun to face tougher anti-money laundering rules, and in July, a federal judge approved a $1.256 billion deferred prosecution agreement with HSBC Bank USA regarding violations of federal anti-money laundering sanctions.

 

For more cases of fraud, check out these InsideCounsel stories:

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